AI stocks have experienced a sharp decline in recent weeks. The Global X Artificial Intelligence & Technology ETF, for instance, is down more than 10% over the past 30 days. Despite the pullback, many AI stocks continue to trade at lofty valuations.
One AI stock, however, appears not only fairly valued, but potentially even cheap despite impressive trailing and expected growth. Many investors don’t yet associate this company with artificial intelligence. But rising AI tailwinds are exactly what make this autonomous driving stock attractive long term.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Uber Technologies is a bona fide AI stock with a cheap valuation
Most consumers regard Uber Technologies (NYSE: UBER) as a transportation company. Investors, however, should consider Uber an AI stock.
The reasoning is simple. Uber is the largest ride-hailing service in the world. The vehicles that comprise its network, however, are expected to go autonomous over the next five years. A survey of experts conducted by McKinsey & Co. concludes that “the global rollout of robo-taxis is now expected to become reality at a large scale in 2030.”
After decades of failed promises, why should investors believe that the self-driving future is finally set to arrive? There’s one key catalyst: AI. “The development of software, actually [autonomous vehicle] software, has really been accelerated based on these larger AI models,” Dara Khosrowshahi, Uber’s CEO, stressed last summer.
Research from McKinsey indicates that AI is the key catalyst for making autonomous vehicles a near-term reality.
“The automotive industry is entering a new phase in the evolution of advanced driver-assistance systems (ADAS) and autonomous driving (AD) — one increasingly defined by generative AI,” the global consultancy concludes. “Today, generative AI is accelerating the shift toward AI-native, end-to-end (E2E) architectures capable of learning driving behavior directly from massive data sets. E2E systems can adapt more effectively to unfamiliar environments, handle greater driving complexity, and improve far more quickly as they process more data.”
Bears fear that autonomous vehicles will disrupt Uber’s market power. That’s a big reason Uber’s stock is down 20% this year. Shares trade at just 15 times forward earnings, with a current free cash flow yield above 7%. And yet, sales are expected to grow 11% in 2026, with another 15% in 2027.
